Turno Electrifying India’s Commercial Vehicles Market

Turno Electrifying India’s Commercial Vehicles Market. The Indian platform for commercial electric vehicles has raised $13.8 million in Series A funding. It started doing business in five Indian states in January 2022. The company has amassed a 20% market share, and it now has the intention to grow quickly.

Turno, founded by Hemanth Aluru and Sudhindra Reddy, promises to make it much simpler for small and medium-sized businesses in India to obtain commercial electric vehicles. The two met while working for the car-sharing company Zoomcar (EVs). The project has the potential to significantly accelerate the adoption of commercial EVs in the country, yielding considerable sustainability benefits, given these SMEs make up around 90% of the country’s logistics business.

“We can see an inflection point around EVs,” says Aluru of buyers’ willingness to switch away from vehicles that depend on a conventional internal combustion engine (ICE) for power. “But the key is to get the financing right, and to do that over the lifetime of the vehicle.”

Most buyers – especially SMEs with weaker financial sheets – require finance when purchasing new cars due to the high upfront cost of all commercial vehicles. But that has run into trouble in the EV industry. Lenders prefer to make loans based on the asset’s worth rather than the borrower’s credit score, but they are unsure of how EVs depreciate over time. Additionally, they are concerned that EV batteries have short shelf lives, especially when compared to ICE-powered vehicles. As a result, customers frequently need to make sizable down payments and pay high borrowing rates, which drives up the cost of EVs.

Turno’s approach is based on cutting-edge technology, allowing it to compete significantly better with SMEs. The business’s platform initially links SMEs with EV producers, offers loans to fund a new purchase, and assures the purchaser of a minimum resale value in the future.

Turno’s comprehension of the electric battery market serves as the foundation for that value proposition. Although EV batteries may no longer be fit for use in vehicles after, say, five years, they can be redeployed as stationary assets in places like data centers and infrastructure installations. This study has uncovered a sizable resale market for EV batteries.

Because money is supplied in partnership with finance providers and a guaranteed resale value is offered, Turno can lend with greater assurance. Additionally, SMEs that purchase a commercial EV through the platform consent to Turno getting information about the usage of the vehicle. Turno may then use analytics to gain a better understanding of the battery’s condition and, consequently, its likely future value. It can even provide incentives to buyers to drive sparingly.

Commercial customers, who use EVs significantly more frequently and produce far more carbon emissions than automobile owners, might adopt them much more quickly, according to Aluru, if this novel business model is implemented. The business believes it can lower the total cost of ownership of a commercial EV by 30% in comparison to alternative financing options by providing loans at lower rates and ensuring a resale value.

“Today, 80 to 85% of India’s automotive fuel consumption is driven by commercial vehicles with internal combustion engines, but there is a strong desire to transition to a green economy, and commercial EV adoption, therefore, holds significant promise,” says Aluru. “Turno was founded with the mission to convert these gasoline miles into electric miles, having a significant positive impact on the environment.”

SME enthusiasm is evident from Turno’s current 20% share of all commercial EV sales in India. The business is expanding at a 30% monthly rate and generates $20 million in revenue annually.

Investors have paid attention. Global venture capital firms B Capital and Quona Capital are leading the current Series A round, which has also drawn interest from previous investors Stellaris Venture Partners and Avaana Capital as well as new investors Alteria Capital and InnoVen Capital.

“Commercial EV sales are heavily dependent on the availability of attractive financing options and today the Indian market is plagued by a lack of truly customer-centric options,” says Karan Mohla, General Partner at B Capital. “Turno has identified a key missing element in the ecosystem that solves the problem of financing as well as distribution and servicing.”